The Service Tax Department has arrested an owner of security firms for evading tax amounting to more than Rs 5 crore, a top official said.

The accused, identified as Mohammed Aslam Choudhary, who was arrested yesterday, has been found guilty of not paying service tax amounting to more than Rs 5 crore, which was collected but not paid to the government.

Choudhary was running security service firm called M/S Honest Securities. He used to keep on creating new firms and closing down the old ones, Mumbai Service Tax Commissioner, S K Solanki, said.

Choudhary has been providing security services to many prominent builders in Mumbai. These builders have also been asked to pay the service tax out of the amount payable to the firm, Solanki added.

"As per the Service Tax law, recovery can be made even from the client of the defaulting firms, if they have to pay some money to the defaulting firms", added Solanki.

Satish Dhavale, Additional Commissioner of Service Tax, said that Choudhary was produced in court today and he has been remanded to judicial custody. "We will be questioning him in jail," Dhavale added.

Sources said that the department had recently sought some information from him, which he did not provide and then went absconding. He also changed the office premises from time to time to avoid action by the service tax officers.

Choudhary had also manipulated the balance sheet and the profit & loss account to show lower turnover to evade service tax, they said.

A case has been registered against a house keeping and facility management firm, for evasion of service tax, officials said.

Sources said that two directors of the company, a CEO and a CFO were granted anticipatory bail by the court. However they have been directed to attend the service tax office every Wednesday and Friday.